Buying and selling firm and market maker Wintermute requested the USA Securities and Trade Fee (SEC) to verify that community tokens shouldn’t be categorized as securities.
In formal suggestions to the company’s request for remark, the corporate said clear steerage on the safety standing of tokens is critical to keep away from the misapplication of securities legal guidelines and make sure the continued progress of crypto markets.
Wintermute mentioned that “community tokens,” that are “intrinsically related to the functioning of a decentralized community or protocol,” are mandatory technical inputs for blockchain networks. Due to this, the corporate mentioned, they essentially differ from monetary merchandise or securities.
The corporate talked about Bitcoin (BTC) and Ether (ETH) as examples of community tokens that shouldn’t be categorized as securities.
Wintermute likens community tokens to commodities
If community tokens had been categorized as securities, each commerce of such digital property within the US would possibly require regulatory compliance with securities legal guidelines. This might have an effect on the liquidity of the tokens, increase prices for merchants and finally push actions offshore.
“Such misclassification dangers stifling innovation and driving blockchain growth and buying and selling exercise exterior of US markets,” Wintermute wrote.
The corporate mentioned community tokens don’t meet the factors for securities even when they’re later traded for revenue or utilized in fundraising rounds.
Wintermute mentioned community tokens perform extra like commodities, collectibles and actual property. These can all be purchased for funding functions with out being handled as securities.
Other than its suggestions, the corporate additionally welcomed SEC guidance excluding stablecoins, memecoins and staking actions from the securities classification. It careworn that the identical stage of readability needs to be prolonged to community tokens.
“Clear steerage throughout these areas will preserve US markets aggressive, encourage continued dialogue with regulators, and create optimum circumstances for adoption and innovation to thrive,” the corporate mentioned.
Cointelegraph reached out to Wintermute for extra info, however didn’t obtain a response earlier than publication.
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Wintermute asks the SEC to make sure DeFi progress
Along with clarifying the problem of community tokens, the corporate additionally requested the SEC to make sure that decentralized finance (DeFi) can flourish alongside centralized markets for tokenized securities.
Wintermute mentioned the company ought to empower each avenues to compete. The corporate mentioned this is able to promote innovation, enhance investor choices and create a world market for tokenized securities.
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